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History of the Proof Platinum Coin Seigniorage Concept, 2010-2013

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"Congress passing a law to abolish the overdraft restriction would have the same operational effect as if it deleted 1551(b) from the US Code or, to use your aircraft carrier example, authorized the US Mint to stamp a $1 billion coin. Either way its an exercise of Uncle Sam’s seignoirage power" (original).

"The simplest way to prevent an overdraft without breaking any law or constitution is for the Treasury to hand a coin of high denomination to the Fed. As Beowulf says, Tim Geithner can hand-deliver this coin" (original).

"(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time. 31 USC 5112(k)" (original).

"The Secretary of Treasury has been delegated pretty damn broad seigniorage power (“specifications, designs, varieties, quantities, denominations, and inscriptions”). Tsy could mint a trillion dollar platinum coin (cost of minting is not related to face value) and deposit it with the Fed" (original).

Following that beo wrote me, and we corresponded by e-mail from 12/15/10, roughly until the Christmas break, exchanging views about PPCS, with me urging beo to blog it, and telling him that I would blog in support of him soon after he did.

"The Fed could not refuse the coins or fail to credit their face value because they are legal tender. Since the Fed is technically in the private sector, acceptance by them of a deposit in the form of the jumbo coins, resulting in the markup of the Mint's Account by their face value, gets recorded technically as a sale of the coins to the private sector." (original).

"The impact of coin seigniorage in eliminating deficits, the national debt, and bringing the debt-to-GDP ratio to zero isn't very important economically, since the size of these numbers doesn't create any solvency risk, or impair the Government's ability to sustain future fiscal activity. But that impact is very important politically and psychologically" (original).

"Joe Firestone has a new post on Coin Seigniorage, where he gives credit to our own Beowolf’s comment on this website.

As far as I’ve been able to determine, it does work operationally. It seems the US Treasury is already legally empowered to simply mint it’s own platinum coin in any denomination it wants and effectively deposit it in its Fed account, rather than sell bonds to the public to fund its Fed account" (original).

"Middle grounds often sound like a good idea theoretically. But in reality they can be incredibly costly because the cautious,compromising approach they require often means accepting the very outcomes one is trying to avoid" (original).

"The President has no choice in this matter. Congress has appropriated money for particular purposes. It has also passed a debt ceiling, and passed a law providing the Administration authority to engage in jumbo coin seigniorage to get revenue necessary to spend appropriations in the presence of the debt limit." (original).

"And yes, there are options that allow the executive branch to continue to deficit spend if it wanted to, ranging from issuing a multi trillion dollar platinum coin to spending under cover of the 14th amendment" (original).

"Here is another option: the Treasury could mint coins to cover all the nation’s spending commitments. As Jack Balkin has pointed out, 31 U.S.C. § 5112(k) authorizes the Treasury to mint platinum coins in any denomination. Balkin suggests that the President could exercise this authority to mint a couple of trillion-dollar coins. By doing so, the President could put an end to the problem created when the Treasury’s revenues are insufficient to meet its spending commitments, without violating any existing federal law. If we accept Balkin’s interpretation of the relevant statutory provision, the central premise of Professor Buchanan’s argument—that default is guaranteed to occur under extant statutes come August 3—isn’t even true to begin with." (original).

"[Coin seigniorage] is the only solution currently being suggested that requires no agreement in Congress and also no challenge to the debt ceiling law itselfIt is the only solution currently being suggested that requires no agreement in Congress and also no challenge to the debt ceiling law itself" (history; original).

"The "jumbo coin" and "exploding option" strategies work because modern central banks don't have to print bills or float debt to create new money; they just add money to their customers' checking accounts." (history; original).

"One creative solution to the U.S. Government's debt-ceiling, which has bubbled up from the progressive MMT (Modern Monetary Theory) economic community, has been called the #trilliondollarcoin meme" (history; original).

The US Mint has used coin seigniorage continuously since the Coinage Act of 1792 (in a legal sense, a single $1 trillion platinum coin is the same as trillion $1 coins but with far less expense and effort). (history; original).

"'The government could solve its debt problem by just minting some large coins. That there’s no limit on how many coins they can make, and there’s no limit on the face value of the coin. So today, for example, you could stamp out 15 $1 trillion coins and you’d take care of the debt and you’d have a little money left over. And, a number of economists actually picked up on that, and there’s this whole dicussion out there now about how you could solve the problem with some $1 trillion coins which you would then put in the government’s bank account, basically. So you don’t actually ever spend the coins, but you can draw against them, and it’s a way to create money…'" (original; cited by).

"VJK argued that because platinum coins are defined as numismatic coins and not circulating coins (such as nickels, dimes, etc.) that means they can only be purchased by collectors (at metal price plus markup) and not the Fed (at face value). This isn’t quite accurate" (original).

"So how could President Obama have his FDR moment? Like FDR, he should signal his intentions for higher level of nominal spending and follow through on it by having the Treasury Department take take the reigns of monetary policy from the Fed. President Obama could do this by announcing a NGDP level target that would be implemented by the Treasury Department creating large-denomination platinum coins that would be deposited at the Fed and used to fund checks to the public." (original).

Fracking "[A]bout two hours into the raid … another of the heroes of this story, Deb Eck, Riverdale resident and balls-of-steel leader came out to plead with the activists to stand down, in other words, to end our resistance to the police efforts to evacuate us from the premises."

"[T]here are options that allow the executive branch to continue to deficit spend if it wanted to, ranging from issuing a multi trillion dollar platinum coin to spending under cover of the 14th amendment" (original).

"Why not have the Treasury mint some $1 trillion coins? This would be very inflationary. Imagine that they instead produced $1 million coins and used them to pay off bonds. People would see the money supply increasing and understand that at some point the value of the money will be going down. So people would stop rolling over bonds" (original).

"If the President doesn’t go that route [14th Amendment], and he doesn’t direct his Treasury Secretary to mint a $1 trillion platinum coin, then you have a situation where House Republicans have the power to control events" (original).

"[T]he US Treasury has the legal authority to instruct the US Mint to create a coin of any denomination and simply deliver it to be deposited in the US Treasury account at the Federal Reserve" (original).

"There was a congressional hearing last week on a bipartisan bill to replace paper dollars with dollar coins. Swell idea I’m sure, however if it passes (probably too late this year but its budgetary savings might get it slipped into a budget deal), Congress would do the scarcely imaginable, it make the Trillion Dollar Coin an even more powerful tool for the Secretary of the Treasury" (original).

"One option might be for Treasury to buy back Treasury debt now held by the Fed (assuming appropriate available supply from Fed inventory). That would drop utilization under the current debt ceiling by $ 1 trillion, allowing Treasury to “reload” on new Treasury issuance" (original).

"[T]he US Treasury could order the US Mint to create a platinum coin of any denomination, deposit it in the Fed’s account and the Fed could then retire some portion of the national debt in what is essentially an exchange of the bonds they hold for the coin. Then the government spends the money they were already told (by themselves) to spend and we don’t get held hostage by the very same government" (original).

"What would the Treasury do with a trillion dollar coin, you ask? Why, deposit it in their account with the Fed, of course. The Fed would then credit the Treasury's account with 1 trillion dollars" (original).

"[T]he coin would have much the same impact as traditional quantitative easing. Issuing and using the coin would be just like QE I, QE II, and the ongoing QE III in impact on our system. It could be considered to be Platinum Coin Easing" (original).

"The MMTers dare to utter the heretical view that money is not intended as a store of value, but instead that it is a tool to be used by government to facilitate the exchange of goods and services..." (original).

"[Carney and Hayes both] see PCS as essentially a band-aid we can put on the debt ceiling problem. They don't see it as something that could introduce a profound change in the background of fiscal policy" (original).

"[The Proof Platinum Coin] demonstrates very clearly that the Government cannot run out of money, and that the claim that it can is not a valid reason for rejecting spending that is in accordance with public purpose" (original).

"So the question that is relevant for us here is whether or not the law that authorizes the creation of platinum coins by the U.S. Treasury lays down an "intelligible principle" to which the Treasury is directed to conform" (original).

"[Nadler] continued: “I’m being absolutely serious. It sounds silly but it’s absolutely legal. And it would normally not be proper to consider such a thing, except when you’re faced with blackmail to destroy the country’s economy, you have to consider things" (original).

"[A]ll the advocates of this insidiously stupid idea which gets a new life every time there is a debt ceiling crisis, are doing, is arguing for a massive devaluation of the dollar: because for the trillion dollar coin idea to be even remotely plausible, the price of Platinum, and by implication the entire precious metals complex, would have to go up by a factor of some 1,100" (original).

Like Mayweather-Pacquiao, the fight never happens. Planned debt ceiling fight cancelled. That seems kind of easy, right? Why didn't Obama think of this before? Because no one's first resort to a debt ceiling fight is to create what is essentially a loonie on horse steroids, duh. (original).

Pages

METHODOLOGY
Here I am collecting all the material I am find so far on the Proof Platinum Coin Siegniorage (PPC/PCS) concept. We can see, way back in 2010, the epicenter of The Coin concept, which may surprise you: blogger beowulf at Warren Mosler's blog -- and this blog, Corrente. Much of the material is taken from a history of The Coin written by letsgetitdone. Other material was found by following link trails outward. Still other material was taken by searching for "platinum" (at Cullen Roche's sites, for example). Contemporary material came from Google, Twitter, reader mail, and following link trails outward from posts.

I'm seeking to trace the origination and transmission of ideas -- or, as we say these days, "memes." Therefore, although I seek to curate an exhaustive collection of links, I quote interesting or unique, rather than representative, material. "Me too" content and reposts are under-represented.

Any mistakes, of course, are my own, and they will exist: I figured out my workflow as I encountered the data, and I'm sure I haven't backfilled all inconsistencies. In addition, I came up through the left blogosphere, and so my ability to search and sort on material from the right is not as strong as it could be. Please contact the blog or leave comments with corrections or additional links: We want the record to be complete and accurate!

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